The market for artificial intelligence (AI) in regulatory technology (regtech) is poised for significant growth, with projections indicating it will reach a value of £5.4 billion by 2028, according to a new report from The Business Research Company. This represents a compound annual growth rate (CAGR) of 36.9%, highlighting the increasing adoption of AI solutions to streamline compliance processes and enhance risk management within financial institutions.
Driving Forces Behind the Growth:
The burgeoning AI in regtech market is fuelled by a confluence of factors, including:
Heightened Regulatory Requirements: Financial institutions face an ever-increasing volume of regulations, demanding sophisticated solutions for compliance and reporting.
Need for Real-Time Monitoring: AI enables continuous monitoring of activities and transactions, facilitating early detection of potential risks and irregularities.
Regulatory Technology Advancements: The rapid evolution of regtech solutions, incorporating AI capabilities, is driving adoption across the sector.
Focus on Customer Protection: AI-powered systems enhance fraud detection, identity verification, and customer due diligence, ensuring greater customer safety and trust.
Cross-Border Compliance: As businesses operate globally, AI helps navigate complex international regulatory landscapes, simplifying compliance efforts.
Key Trends Shaping the Market:
The AI in regtech landscape is characterised by emerging trends:
Adoption of Machine Learning (ML) and Natural Language Processing (NLP): These technologies facilitate automated data analysis, pattern recognition, and intelligent decision-making within regtech applications.
Explainable AI (XAI): Growing emphasis on transparency and accountability is driving the development of AI systems that provide clear explanations for their decisions, enhancing trust and regulatory acceptance.
Predictive Analytics: AI algorithms leverage historical data to predict potential risks and compliance issues, allowing proactive mitigation strategies.
Automation of Compliance Processes: AI-powered solutions streamline manual tasks, reducing human error and improving efficiency in compliance operations.
Risk Assessment and Management: AI algorithms can analyze vast datasets to identify and assess risks, enabling more effective risk management strategies.
Regulatory Sandboxes and Innovation Hubs: These initiatives foster experimentation and development of innovative AI-driven regtech solutions.
Leading Players in the AI in Regtech Market:
Several prominent companies are actively shaping the AI in regtech landscape, including:
IBM Watson Financial Services
White and Case LLP
Sysxnet Limited
Trulioo
Onfido
ComplyAdvantage
Behavox Ltd.
FundApps Ltd.
Sift Science
AlgoDynamix
WorkFusion
Trunomi
Elliptic
Fund Recs
IdentityMind Global
Corlytics Ltd.
Silverfinch Consultancy Pvt Ltd
Merlon Intelligence
Open Source Investor Services
AQMetrics Limited
Ayasdi
CheckRecipient Limited
KYC Exchange Net AG
Text IQ
Market Segmentation:
The report segments the AI in regtech market based on various factors:
By Type: Solutions (software, platforms, tools) and Services (consulting, implementation, support)
By Operation Model: Unsupervised Learning, Supervised Learning, Reinforcement Learning, Semi-Supervised Learning
By Application: Regulatory Compliance, Risk Management, Financial Crime Detection, Identity Management, Compliance Support, Analytics, Automated Trading
Market Outlook and Potential:
The AI in regtech market is poised for continued growth driven by increasing regulatory scrutiny, the need for enhanced security, and the potential for significant operational efficiencies. Organisations embracing AI-powered solutions will gain a competitive edge by streamlining compliance processes, mitigating risks, and improving customer trust.
Disclaimer: This article is based on information extracted from the original news article provided. The Business Research Company is the source of the data and analysis presented. Further investigation and independent verification are recommended for a comprehensive understanding of the AI in regtech market.